Plans to give new parental leave rights to workers in the UK should be shelved, says the Confederation of British Industry's director general Digby Jones.

Mr Jones was speaking at a press conference on the eve of the business organisation's annual conference in Birmingham.

The government must give business a breathing space

Digby Jones

He said that businesses were struggling to cope with the 16 different pieces of employment legislation introduced since the current government came to power in May 1997.

The cost to firms of new regulations has topped £12bn, made up largely of £7bn from the working time regulations and £4.5bn from the minimum wage's introduction.

Mr Jones said: "It is the excessive red tape which has caused most of the headaches, rather than the rights themselves.

Parental leave

"It is blindingly obvious that many firms have been struggling with the pace of the changes...The government must give business a breathing space."

The CBI says many firms are opposed to proposals to give new mothers the right to return to work part-time.

Mr Jones also said that plans to allow fathers to take extended periods of parental leave for any child under the age of five, was also worrying employers.

"It is very difficult to plan your business, and plan your productivity when you don't know whether your key people are going to be there for a long period of time."

Mr Jones said that the low tax regime in the UK was one of the advantages it held over competitor countries.

'Return to the 1970s'

The CBI says that that tax burden on business has risen by £5bn a year in the past three years, and said it feared investors may look elsewhere if it continued to rise.

Mr Jones also urged fuel protestors not to take direct action, and repeat the blockades seen in September, because of the negative impact that would have on the UK economy.

He said that the CBI and other organisations were lobbying behind the scenes to get changes.

Investors and companies abroad would see it as a return to the sort of industrial unrest seen in the UK during the 1970s, which would do huge damage to the UK in the long term.

Euro debate

The CBI conference, held at the International Convention Centre, was dominated by the euro last year, but transport has since overtaken it in the list of member priorities, said Mr Jones.

But the euro is likely to resume its place at the forefront of debate on Monday when European Commission president Romano Prodi addresses the conference.

The new president of the CBI, Sir Iain Vallance, who is also chairman of British Telecom, said he hoped that the government had a date in their mind when the UK would be in a position to adopt the euro.

Mr Jones said he disagreed with Conservative policy to rule out euro membership for a fixed term, but said that economic conditions were not right for the UK to adopt the euro at the moment.